Saving $10,000 a year – is it on your mind? Crossing into the “tens of thousands” threshold is meaningful and to some, an exciting challenge! Perhaps you’re saving for a specific upcoming purchase, to get your long-term retirement savings on track, or something more medium-term. Setting a goal to save $10,000 in a year is substantial, yet feasible for many with the right mindset and dedication.
We’ve put together a guide on how you can take action and work toward meeting a $10,000 savings goal. We know everyone is at a different starting point, so keep an open mind, then choose the tips that are most realistic for your lifestyle and needs.
Let’s get going!
$10,000 Savings Challenge
Embarking on a financial journey to save $10,000 within a year is a challenge that empowers you both now and in the future. It’s not merely about accumulating a sum of money. It’s a commitment to building strong financial habits, resourcefulness, and long-term vision. When you set this goal, it’s important to intentionally dedicate your time and energy so you can reach it.
Map out the $10,000 savings goal to another type of challenge: running a race. Whether you’re doing laps around the track during P.E. class or running a marathon, you know the feeling of inching toward the finish line with every lap or mile marker you reach. Maybe you’re pacing yourself to improve your splits or maybe you’re sprinting to the finish. Either way, you can apply that to a big financial goal. Each month is 8.33% of the year, so challenge yourself to stay on pace or reach the goal a little faster by contributing more than that if possible and leveraging the power of compound interest.
To stay on track with your goal, set reminders to keep yourself engaged. In Milli, you can use a Jar to set individual savings goals. Set multiple Jars up or just one for the $10,000 challenge – whatever suits your needs best. Upload a custom image to inspire you. Along the way, you’ll see the progress bar fill which can keep you motivated! You can also set reminders on a digital calendar to prompt you in the future. Schedule them around your payday cycle or on a monthly basis to remind you to check back in on your goal and deposit funds in your dedicated savings account or Jar.
Now, let’s break down what saving that amount in a year looks like on a milestone basis:
- $833.33 per month
- $191.31 per week
- $27.40 per day
Think of these as your mile markers (or quarter mile lap markers). Then, map out how you’ll get there. Keep reading for more specific tips on what you can do to get there!
Increasing Your Ability to Save
To accelerate your savings towards a $10,000 goal within a year, one of the best and most realistic ways is to increase and optimize your income. If you’re looking to net $10,000 in savings, aim to earn $12,000 – $14,000 more per year depending on your federal marginal tax rate and state income tax rate. Here are some ways to bring in some more cash to save:
Find a new job
Pursuing a better-paying job can significantly bolster your income. Do research about the typical pay for your role and experience level to get an idea of what more you could earn. Data from payroll provider ADP found that in March 2023, the median year-over-year pay increase for job switchers was 10%.
Ask for a raise
Advocating for a raise at your current job may be the easiest way to increase your earnings. Evaluate if you’re due for a promotion that may yield a bigger raise than a merit increase or cost of living adjustment for your existing role. The ADP research linked above found that job stayers had a median pay increase of 5.1% last year. For most workers, that raise alone won’t be enough to reach a $10,000 savings goal, but it is a great start.
Find a side hustle
We’ve all heard the advice to find a side hustle, and it’s even more important the more you aim to save. If your goal is to save $10,000 in a year, this side hustle will likely need to be something with a higher pay rate, like consulting in your area of expertise. Rideshare driving or food delivery is a common side hustle example, but if the net pay rate of that gig is even $20 per hour, you would need to work over 500 hours to reach the goal. If you’re already working part time or full time, you may not have that much extra time!
So, think about the most valuable skills you can offer. Use platforms like Upwork to find a fair rate, then figure out how many hours you would need to work to reach your goal. Or, take on a few flat-rate projects throughout the year.
If you’re one of the 13% of the workforce that has a master’s degree, consider applying to be an adjunct professor for college courses. Adjunct professor roles can pay upwards of $80 per hour, or $4,000 on a per class basis (depending on the specific college or university). SAT/ACT/Advanced Placement test tutoring can also fetch high rates as well and is often done on nights and weekends so would not conflict with a daytime job.
For many types of side hustle work, you may be compensated as an independent contractor, so make sure to carve out money for the higher tax rate. (Hint: You can set that aside in a Jar and earn interest on it in the meantime!)
Leverage your 401(k)
Maximizing your contributions to a 401(k) retirement account not only helps your financial security in the long run, but also offers short-term tax advantages and potential employer matches. Many employers will match a percentage of your contribution, so make sure you understand the match requirements and see if that works in your budget. For the 2024 tax year, the limit that an employee can contribute is $23,000 in one year, or $30,500 for people 50 and older.
Looking for new jobs like we advised earlier? Be sure to evaluate the new employer’s 401(k) match rate when making the decision!
Selling Assets
Selling unused assets can jumpstart your progress toward achieving any significant savings goal. Most of us have unused items lying around that could be turned into cash. These might include:
- Electronics – computers, cameras, video games and consoles, tablets, e-readers, smart TV devices
- Instruments
- Sporting equipment
- Jewelry
- Designer goods
- Furniture
- Collectible items
How much of a dent can this make in your goal? Every $100 is 1% toward the $10,000 savings amount! This is a good place to start your savings challenge because the sooner you sell, the faster you can start earning interest on the cash that you get. If you sell an asset this month, you have 11 or 12 months of interest you can earn, compared to selling an item months or years from now, or not selling because the item loses value.
You may choose to take items to a consignment store or other store that takes in secondhand merchandise to resell, which can be a convenient way if you’re short on time to find a buyer. However, you can often make more money selling goods yourself on an online marketplace depending on shipping costs.
Need some inspiration? A TikTok creator by the name of Rachel with the fitting handle @payoffmyhouseproject chronicles her experiences selling items around her house and putting the extra money toward paying off her mortgage, showing how much interest she will save by pre-paying in advance. Check out her account or give her a follow to stay motivated!
Remember: the key thing is to only sell items you know for sure you will not need again, so that you don’t find yourself re-buying the item and end up spending more.
Cut Back on Spending to Save More
Depending on your income and lifestyle, you may be able to make serious inroads to saving $10,000 a year by cutting back on spending, or it may be more minor. You may need to make more substantial shifts on the things that take up the most room in your budget to save.
Reducing housing costs
Housing makes up a significant portion of many budgets, and for renters, that cost doesn’t come with the benefit of building equity over time. The typical renter spends 30% of their income on rent, with that figure being higher in some metros like New York, Miami, Los Angeles, and more.
If you’re renting, one possible option to cut back on spending is to move to a more affordable place when your lease is up. Depending on the vacancies in your area, some rental communities offer new-tenant specials that can help you save as well. You’ll need to calculate if it would be effective after moving, security deposits, and any impact on transportation costs.
Whether you own or rent, if you have a spare room in your home, could you take on a tenant or roommate to lower your housing costs? Consider combining forces with a member of your family. The percentage of Americans living in multigenerational homes has grown to nearly one in five.
If you have a basement or accessory building on your property, could that be turned into a rental unit? If you proceed with this route, do your due diligence to know and follow all fair housing laws.
If something like that is not realistic for you, another option is to do repairs or inexpensive home projects that can save energy and cut down on utility bills. You don’t have to replace windows or appliances to notice a difference! Some energy efficient projects are more like home maintenance to-dos that cost just a few dollars in supplies.
Reducing transportation costs
Like housing, transportation can take up a sizeable portion of your personal or household budget. Reducing your transportation costs can be as simple as cutting back on car usage to save on gas and wear and tear. If you’re looking for a new job opportunity, consider looking for one with a shorter commute, or hybrid or remote work setup. Saving money on gas, tolls, or transit fare can add up over the course of a year!
However, to make more of a dent in your transportation spending, you may want to reconsider car ownership. If you have a multi-car household, could you make do with one fewer car? The United States Census Bureau’s 5-Year American Community Survey found that between 2018 and 2022, the number of households with zero, one, or two cars all declined, possibly in part due to the rise of remote and hybrid work after the pandemic.
Selling a car could yield you the cash from the car sale and save money on car insurance, registration, fuel, and maintenance. Whether or not this is realistic for you will depend on your lifestyle and location. You could do a trial run of this before committing where you try not using your car for a few weeks.
Reducing personal spending
Depending on your hobbies and lifestyle, you may have room to trim back a notable amount and contribute to your savings goal – or perhaps not! In general, it’s always a good idea to look at recurring purchases and see what you no longer need so you can spend more efficiently. Plus, make it a habit to use what you have on hand and make use of free resources first.
For entertainment, YouTube has a rotating selection of free movies and you can download their free app on smart TV devices. Libby makes it easy to borrow digital books and audiobooks from libraries on your device. If you or a family member or friend live in a community with recreation amenities, take advantage of them as a spot to hang out! If you want to get out of the house, check out free or low-cost events in your area. Follow your city or towns in your area, your county, and local news organizations on social media to stay up to date on what’s happening.
Conclusion
If you’re ready to make some lifestyle shifts, it’s entirely possible to save $10,000 in one year (or an additional $10,000 beyond your current savings rate). Choose what tips work for your lifestyle when it comes to finding additional income opportunities and cutting back spending. It all adds up over time. Regardless of where you’re starting financially, we all have the same 365 days in a year, so use that time to work steadily toward your financial goals, and you’ll be amazed at the progress you can make!
Keep reading on the Milli blog:
How to Avoid Lifestyle Creep
How to Save Money Without Giving Up Your Lifestyle
3 Important Money Moves for Gen X
